Credit card insurer CPP, already under the cloud of a regulatory probe, suffered a fresh blow when Barclaycard decided against renewing its contract.

CPP, which helps victims of identity theft, has been under investigation by the Financial Services Authority since last March over its sales technique.

Shares in the company, which floated in 2010, plunged more than 17% to an all-time intra-day low of 97.95p in early trade, and are now down nearly 12% at 104.7p.

Barclaycard suspended some sales of CPP products last year and has now decided to end all others within three to six months. CPP said the loss of the contract would have an "adverse imapct" on revenues and profits from 2012.

Everything hinges on the outcome of the FSA investigation. Henry Carver at brokerage Peel Hunt said CPP could lose other customers, especially in Britain, and kept his "sell" rating on the stock.

Barclaycard's decision not to renew its contract with CPP confirms our concerns over the risk of the loss of business partners in wake of the FSA investigation, the duration and outcome of which remain uncertain. The risk of further business partners ceasing their relationship with CPP remains very high, overshadowing forecasts.

Not worth the risk: Until the FSA investigation is complete, the shares will remain volatile. We believe there is potential for the international growth story to deliver value, but only if the outcome of the investigation is favourable.

Naturally, CPP sought to put a brave face on the situation.

The board remains positive about the group's prospects in the UK as the new business pipeline continues to build, the consumer appeal of the group's products remains strong, and relationships with business partners remain good.